iwallstreet

Vanar is a next-generation L1 EVM blockchain redefining what 'onchain' means. Built for global adoption, Vanar brings real data, files, and applications directly onto the blockchain - with no servers, no limits, and no IPFS.

AI Overview

The 3-5-7 rule in trading is a risk management framework where you risk a maximum of 3% of your capital on a single trade, keep your total exposure across all open positions under 5%, and aim for a profit target that is at least 7% of your risk, ensuring winners are significantly larger than losses. It helps beginners control capital, prevent overleveraging, and build discipline by creating clear limits for risk per trade, portfolio exposure, and reward-to-risk ratio.  
Breakdown of the numbers
3% Risk per Trade:Caps the potential loss on any single trade (e.g., $300 on a $10,000 account).5% Total Exposure:Limits your total capital at risk across all open positions (e.g., $500 on a $10,000 account).7% Profit Target:Aims for a profit that is at least 7% of your account, encouraging trades with a better risk/reward profile (e.g., aiming for $700 profit on that $10,000 account if risk was $300).
How it works in practice
Calculate your risk:Determine 3% of your account balance as your maximum loss per trade (your "risk amount").Size your position:Based on your stop-loss placement, determine the position size that keeps your potential loss to that 3% figure.Track total exposure:Sum the risk amounts (not position values) of all your open trades; it shouldn't exceed 5% of your capital.Set profit targets:Aim for winning trades where your profit is at least 7% of your total account, ensuring winners significantly outweigh losers.
Benefits
Protects Capital: Prevents catastrophic losses from one bad trade or market event.Reduces Overexposure: Stops you from taking on too much risk across correlated assets.Improves Psychology: Provides clear rules, reducing emotional decision-making and encouraging discipline.